26 U.S.C. § 773 - Computations at partnership level

26 USC 773 - Computations at partnership level

(a) General rule 

(1) Taxable income 
The taxable income of an electing large partnership shall be computed in the same manner as in the case of an individual except that
(A) the items described in section 772 (a) shall be separately stated, and
(B) the modifications of subsection (b) shall apply.
(2) Elections 
All elections affecting the computation of the taxable income of an electing large partnership or the computation of any credit of an electing large partnership shall be made by the partnership; except that the election under section 901, and any election under section 108, shall be made by each partner separately.
(3) Limitations, etc. 

(A) In general 
Except as provided in subparagraph (B), all limitations and other provisions affecting the computation of the taxable income of an electing large partnership or the computation of any credit of an electing large partnership shall be applied at the partnership level (and not at the partner level).
(B) Certain limitations applied at partner level 
The following provisions shall be applied at the partner level (and not at the partnership level):
(i) Section 68 (relating to overall limitation on itemized deductions).
(ii) Sections 49 and 465 (relating to at risk limitations).
(iii) Section 469 (relating to limitation on passive activity losses and credits).
(iv) Any other provision specified in regulations.
(4) Coordination with other provisions 
Paragraphs (2) and (3) shall apply notwithstanding any other provision of this chapter other than this part.
(b) Modifications to determination of taxable income 
In determining the taxable income of an electing large partnership
(1) Certain deductions not allowed 
The following deductions shall not be allowed:
(A) The deduction for personal exemptions provided in section 151.
(B) The net operating loss deduction provided in section 172.
(C) The additional itemized deductions for individuals provided in part VII of subchapter B (other than section 212 thereof).
(2) Charitable deductions 
In determining the amount allowable under section 170, the limitation of section 170 (b)(2) shall apply.
(3) Coordination with section 67 
In lieu of applying section 67, 70 percent of the amount of the miscellaneous itemized deductions shall be disallowed.
(c) Special rules for income from discharge of indebtedness 
If an electing large partnership has income from the discharge of any indebtedness
(1) such income shall be excluded in determining the amounts referred to in section 772 (a), and
(2) in determining the income tax of any partner of such partnership
(A) such income shall be treated as an item required to be separately taken into account under section 772 (a), and
(B) the provisions of section 108 shall be applied without regard to this part.